Overview

Abstract (English)

In Canada, rich neighborhoods are less victimized than poor ones, rich people are more victimized at given neighborhood, and households in rich neighborhoods invest more in private protection. We provide a theoretical explanation to these facts. Our model emphasizes the notion of imperfect observability of private protection. A fixed supply of criminals decide which neighborhood to enter, and how much they spend to compare potential victims. Households differ in wealth and choose the amount of self-protection. The model features strategic complementarity between criminals’ efforts and households’ protection investments. In rich neighborhoods, households may enter a rat race to protection, which drives criminals towards poorer areas. The implications of our model are tested using data from the Canadian Victimization Survey.

Abstract (French)

Please note that abstracts only appear in the language of the publication and might not have a translation.